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QBE to expand UK business

QBE will look to make further acquisitions and broaden the reach of its specialist products across the UK during 2007.

The Australian insurance giant said it would look to expand its UK and European businesses using its "distribution channels and diverse product skills in our London operations".

This would include strategic acquisitions and using its "London market expertise for specialist products" to build its UK regional business, it said.

The insurer has been tipped as a potential bidder for both Provident's motor insurance business and Saga.

Meanwhile, a strong performance from the insurer's Lloyd's operation, Limit, saw QBE's European operations' profits increase by 60% in 2006.

The division's insurance profits were $A870m in 2006, compared to $A543m in the previous year.

Gross written premiums increased by 9% to $A5,061m.

The combined operating ratio improved by over six points to 85.9% in 2006.

Limit, Lloyd's largest managing agent, reported profits of $A432m in 2006, double that in 2005. QBE said the performance was due to the lower level of large catastrophes and higher premium rates, particularly in energy and US-based property risks.

It added it would not be tempted to increase its exposure to US and Gulf of Mexico hurricanes in 2007, despite the relatively low level of claims in 2006.

The combined ratio improved to 82.1% from 94.5%. Gross written premium increased 21% to $A2,711m.

The division's other operation QBE Insurance (Europe) reported a 33% increase in profits to $A437m in 2006, despite softening rates in many lines of business.

The combined operating ratio improved 88.8% from 90%. But the company warned that a "slight deterioration" in the combined operating ratio in 2007 was expected due to softening rates in its long-tail business lines.